U.S. v. W.R. Grace

• Decision Date: 14 July 2006
• Docket Number: No. CR 05-07 M SWM.,CR 05-07 M SWM.
• Citation: 439 F.Supp.2d 1125
• Parties: UNITED STATES of America, Plaintiff, v. W.R. GRACE, Alan R. Stringer, Henry A. Eschenbach, Jack W. Wolter, William J. McCaig, Robert J. Bettacchi, O. Mario Favorito, Robert C. Walsh, Defendants.
• Court: U.S. District Court — District of Montana

439 F.Supp.2d 1125

UNITED STATES of America, Plaintiff, v. W.R. GRACE, Alan R. Stringer, Henry A. Eschenbach, Jack W. Wolter, William J. McCaig, Robert J. Bettacchi, O. Mario Favorito, Robert C. Walsh, Defendants.

No. CR 05-07 M SWM.

United States District Court, D. Montana, Missoula Division.

July 14, 2006.

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Angelo J. Calfo, Harold Malkin, Michelle K. Peterson, Yarmuth Wilsdon Calfo, Seattle, WA, Michael F. Bailey, Bailey & Antenor, Missoula, MT, David S. Krakoff, Gary A. Winters, Mark Holscher, Mayer Brown Rowe Maw LLP, Washington, DC, Ronald F. Waterman, Gough Shanahan Johnson & Waterman, Helena, MT, Jeremy Maltby, O'Melveny & Myers, Los Angeles, CA, William Adam Duerk, Michael J. Milodragovich, Milodragovich Dale Steinbrenner & Binney, Missoula, MT, Elizabeth Van Doren Gray, Sowell Gray Stepp & Lafitte, Columbia, SC, Palmer A. Hoovestal, Hoovestal Law Firm, Helena, MT, William A. Coates, Roe Cassidy Coates & Price, Greenville, SC, for Defendants.

ORDER

MOLLOY, Chief Judge.

I. Introduction¹

The seven individual Defendants have filed motions to sever their trials from Defendant Grace and, in certain instances, all other co-defendants as well. The motions are based on varying grounds. The multifaceted motions include assertions about the prejudicial effect of trying some defendants together, the length of the trial, and the individual Defendants' intent to rely on an advice of counsel defense which must be established through the presentation of some documents in which Defendant Grace claims an attorney-client privilege. Individually the Defendants argue that Grace's attorney-client privilege claim compels separate trials, although they do not explain why Grace's privilege claim would be of any less validity at a severed trial.

The United States opposes the motions to sever. For the reasons that follow, the trial of Defendants Favorito and Stringer will be severed. Examination of documents produced under seal convinces me that if severance is denied Fifth and Sixth Amendment issues would inevitably give rise to a serious question of fairness at a joint trial. Defendants Favorito and Stringer will be tried together at a date to be set. The remaining Defendants will be tried jointly as scheduled on September 11, 2006.

II. Analysis

A. Legal Standard

The public has a substantial interest in the joint trial of defendants jointly charged under Federal Rule of Criminal Procedure 8(b). United States v. Camacho, 528 F.2d 464, 470 (9th Cir.1976). The public interest favors joint trials because such trials "`conserve state funds, diminish inconvenience to witnesses and public authorities, and avoid delays in bringing those accused of crime to trial.'" United States v. Lane, 474 U.S. 438, 106 S.Ct. 725, 88 L.Ed.2d 814 (1986) (quoting Bruton v. United States, 391 U.S. 123, 134, 88 S.Ct. 1620, 20 L.Ed.2d 476 (1968)). A joint trial also helps to avoid "the scandal and inequity of inconsistent verdicts." Zafiro v. United States, 506 U.S. 534, 537, 113 S.Ct. 933, 122 L.Ed.2d 317 (1993) (quoting Richardson v. Marsh, 481 U.S. 200, 210, 107 S.Ct. 1702, 95 L.Ed.2d 176 (1987)). The Ninth Circuit has found joint trial to be "particularly appropriate where the co-defendants are charged with conspiracy, because the concern for judicial efficiency is less likely to be outweighed by possible prejudice to the defendants when much of the evidence would be admissible against each of them in separate trials." United States v. Fernandez, 388 F.3d 1199, 1242 (9th Cir.2004).

Federal Rule of Criminal Procedure 14(a) states: "If the joinder of offenses or defendants in an indictment, an information, or a consolidation for trial appears to prejudice a defendant or the government, the court may order separate trials of counts, sever the defendants's trials, or provide any other relief that justice requires." A trial judge has wide discretion in deciding a motion to sever, and such decisions will seldom be disturbed on appeal. United States v. Ponce, 51 F.3d 820, 831 (9th Cir.1995). The Ninth Circuit has characterized the scope of review as "extremely narrow," see United States v. Mariscal, 939 F.2d 884, 886 (9th Cir.1991), and quoted with approval a Second Circuit decision calling a district court's severance ruling "virtually unreviewable," in United States v. Baker, 10 F.3d 1374, 1387 (9th Cir.1993) (quoting United States v. Stirling, 571 F.2d 708, 733 (2d Cir.1978)). It is not enough for a defendant to show that he would stand a better chance of acquittal in a separate trial. Zafiro, 506 U.S. at 540, 113 S.Ct. 933. Severance should be granted only where joinder is "`so manifestly prejudicial that it outweighs the dominant concern with judicial economy.'" United States v. Doe, 655 F.2d 920, 926 (9th Cir.1980) (quoting United States v. Brashier, 548 F.2d 1315, 1323 (9th Cir. 1976)). The Supreme Court has alternatively cast the standard as one under which severance should not be granted unless "there is a serious risk that a joint trial would compromise a specific trial right of one of the defendants, or prevent the jury from making a reliable judgment about guilt or innocence." Zafiro, 506 U.S. at 539, 113 S.Ct. 933.

The following factors are among those to be considered in evaluating the prejudicial effect of joinder:

(1) whether the jury may reasonably be expected to collate and appraise the individual evidence against each defendant;

(2) the judge's diligence in instructing the jury on the limited purposes for which certain evidence may be used;

(3) whether the nature of the evidence and the legal concepts involved are within the competence of the ordinary juror; and

(4) whether [the defendant can] show, with some particularity, a risk that the joint trial would compromise a specific trial right of one of the defendants, or prevent the jury from making a reliable judgment about guilt or innocence.

Fernandez, 388 F.3d at 1241 (9th Cir. 2004). The first two factors bear particular emphasis in the severance inquiry. Id. "The judge's diligence in instructing the limited purposes for which various evidence may be used is a `critical factor' in assessing the jury's ability to compartmentalize the evidence against each defendant." Baker, 10 F.3d at 1387 (quoting United States v. Cuozzo, 962 F.2d 945, 949 (9th Cir.1992)). Careful and frequent cautionary instructions can reduce or eliminate any prejudice which might otherwise result from a joint trial. See United States v. Castro, 887 F.2d 988, 998 (9th Cir.1989); Fernandez, 388 F.3d at 1243. Even so, there are some situations that make frequent cautionary instructions a mere formality or a procedural nicety that substitutes a form of fairness for the substance of fairness.

Severance is sometimes available when two or more co-defendants intend to present antagonistic defenses. United States v. Angwin, 271 F.3d 786, 795 (9th Cir.2001). "To warrant severance on the basis of antagonistic defenses, co-defendants must show that their defenses are irreconcilable and mutually exclusive." Id. Defenses are not mutually exclusive unless "`acquittal of one codefendant would necessarily call for the conviction of the other.'" Id. (quoting United States v. Tootick, 952 F.2d 1078, 1081 (9th Cir.1991)); see also United States v. Throckmorton, 87 F.3d 1069, 1072 (9th Cir.1996) (severance requires a defendant to show that "the core of the codefendant's defense is so irreconcilable with the core of his own defense that the acceptance of the codefendant's theory by the jury precludes acquittal of the defendant"). Defenses which are not mutually exclusive but are merely mutually antagonistic do not require severance. Zafiro, 506 U.S. at 538, 113 S.Ct. 933 (severance based on mutually antagonistic defenses not required where two defendants claimed ignorance of the presence of drugs in apartment).

2. Mega-trial

Some of the individual Defendants argue that the Court should apply a different severance analysis in this case because the case will be a "mega-trial." In Baker, the Ninth Circuit suggested that district courts be especially mindful of the potential need for severance in "mega-trials." 10 F.3d at 1390-1393. Where it appears from the number of defendants and the number of charges that a trial will be of abnormal duration, the circuit recommends that a district court "elicit the prosecution's good-faith estimate of the time needed to present its case." Id. at 1392. "When the estimate exceeds four months, the judge should require the prosecution to justify its conclusion that a joint trial serves the ends of justice. When more than ten defendants are involved, this justification should be especially compelling." Id. The Defendants contend that this case will require a mega-trial under Baker and ask that the burden be shifted to the government to explain why the ends of justice are best served by a joint trial.

In this argument the Defendants are wrong, because the trial in this case will not be as long nor as cumbersome as the trial in Baker. The trial in Baker lasted 16 months and featured 15 defendants charged in 44 counts, including two conspiracy counts and one count of continuing criminal enterprise. Id. at 1386. The court of appeals stated its belief that the entire case would have required less than 16 months of courtroom time if the same defendants had been tried in "manageable groups of three or four." Id. at 1390.² Here the government has estimated that it will take less than three months to present its case-in-chief.³ The Defendants' repeated predictions of a trial lasting longer than six months are inaccurate. There are only eight defendants, and they have worked in concert throughout this proceeding. Every defendant is named in the conspiracy count that lies at the heart of this prosecution, meaning separate trials would multiply, rather than reduce, the courtroom time needed to try this case.

This...